Apple Pay transactions totaled $10.9B in 2015, suffers growing pains, report says

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Comments

  • Reply 21 of 47
    brucemcbrucemc Posts: 1,541member
    tokyojimu said:
    I use it sometimes just for fun, both in the U.S. and in Taiwan, but the truth is it's often slower than swiping and takes about the same amount of time as dipping. It really is a solution in search of a problem.
    I use it on Apple Watch, so a different experience. It is a little faster, and much more convenient, than hauling out the wallet to get the card. 
    chia
  • Reply 22 of 47
    ericthehalfbeeericthehalfbee Posts: 4,353member
    Why do people always bring up speed?

    The real reason to use Apple Pay is security by not having your card number available for possible skimming. The fact it's fast & easy is the icing on the cake. 
    latifbpchiaration al
  • Reply 23 of 47
    VisualSeedVisualSeed Posts: 217member
    Apple Pay is a feature of the Apple ecosystem and not product or service onto itself at the moment. Apple wouldn't need to make any revenue at it as long as it drove users to its products all would be good. 
  • Reply 24 of 47
    VisualSeedVisualSeed Posts: 217member
    Why do people always bring up speed?

    The real reason to use Apple Pay is security by not having your card number available for possible skimming. The fact it's fast & easy is the icing on the cake. 
    I like the convenience, but as someone who just recently had yet another bankcard compromised due to a merchant's refusal to support NFC, I'm making a point to go out of my way to use cash or Apple Pay only.
    ration al
  • Reply 25 of 47
    slurpyslurpy Posts: 5,355member
    red oak said:
    $10.5 billion would net Apple approx $15 million in revenue, assuming the reported .015% commission for all transactions.  Likely, the net is much smaller.  Then, subtract all the expenses including marketing and employees costs

    Not good if true,given Apple has been at this for a couple of years  


    Revenue is irrelevant. Apple Pay was never meant as a huge revenue generator. It's a value added feature, that makes iOS devices more useful, functional, lucrative, and strengthens the ecosystem. This is not something they're counting on to fund their next big thing.
    latifbpchia
  • Reply 26 of 47
    ericthehalfbeeericthehalfbee Posts: 4,353member
    Samsung Pay gets $500 million in 6 months and it's a success.

    Apple Pay gets $11 billion in 12 months (11 times Samsung Pay) and it's a disaster. 
    latifbpchiabadmonk
  • Reply 27 of 47
    emoelleremoeller Posts: 547member
    Likely struggling also because it's also facing some new, formidable
    headwind. See:

    ComputerWorld - EMV rules ruining Apple Pay :

    http://www.computerworld.com/article/3074888/retail-it/emv-rules-ruining-apple-pay.html

    Interestingly, I think most - if not all - credit cards have an area for the
    cardholder's signature on back, and states, "Not Valid Unless Signed",
    yet I have never seen any cashier check for any signature on the
    back of any cards that we have ever had or used. There seems to
    exist a double standard for authentication, depending on method used.
    Thanks for this link, it explains why I now have to sign transactions, which is really a pain and holds up the line.  I would hope that Apple is working to correct this.  In speaking with POS folks they really have no clue about these new terminals and how they work.  For them it is a large capital expense that was/is being forced on them by the card issuers under threat of transferring fraud liability to the retailer if they don't install them.  While there may be 'smarter' terminals that can distinguish biometrics I'll bet they are more expensive and probably require more installation and setup time,
  • Reply 28 of 47
    red oak said:
    $10.5 billion would net Apple approx $15 million in revenue, assuming the reported .015% commission for all transactions.  Likely, the net is much smaller.  Then, subtract all the expenses including marketing and employees costs

    Not good if true,given Apple has been at this for a couple of years  


    I don't think apple-pay is primarily a money-making venture. it's more of an addition to the eco-system, if they can squeeze a few $ from it on top then fair enough. Some things they'll take a hit on to better the user experience.
  • Reply 29 of 47
    lukeilukei Posts: 370member
    It's a done deal in the UK as it is just the same as touch pay credit/debit cards.



  • Reply 30 of 47
    bobschlobbobschlob Posts: 1,074member
    Using old version touch ID units in their new phones only hurt themselves.
    edited June 2016
  • Reply 31 of 47
    LandanLandan Posts: 7member
    Apple Pay is the number One feature on my Apple Watch, It's much quicker than any other form of payment. Here in the UK I use for my daily commute, swiping my watch near the reader instead of my Oyster card on the London Underground. I would say at least 90% of all my transactions are paid using Apple Pay now. A somewhat nice surprise is that I can use my watch to for payments far in excess of the £30 limit found on contactless debit and credit cards
  • Reply 32 of 47
    sessamoidsessamoid Posts: 182member
    Oddly, the country with the widest penetration of contactless payment I've seen is one that doesn't yet have Apple
    pay--Spain. Pretty much everywhere I've been in Spain takes Applepay, from the big stores to the smallest convenience stories to taxis. I rarely had to take out a card there. Most merchants had never seen it used before, but were delighted to see it in action. 
    ration al
  • Reply 33 of 47
    the.bearthe.bear Posts: 14member
    Samsung Pay gets $500 million in 6 months and it's a success.

    Apple Pay gets $11 billion in 12 months (11 times Samsung Pay) and it's a disaster. 
    And who calls Samsung Pay a success? Provide a single link that claims it to be so. Especially since people with Samsung devices are far more likely to use Android Pay - who has been adding 1.5 million new users a month in the U.S. - than Samsung Pay. Samsung Pay is actually pretty good from the hardware perspective because of their acquisition of Loop Pay and integrating it into their devices. But it still represents yet another failed attempt on their part to compete with Google on software and services.
  • Reply 34 of 47
    rogifan_newrogifan_new Posts: 4,297member
    How can anyone say it's faster to swipe a card? And the chip cards where you insert instead of swiping certainly aren't faster than Pay.
    latifbp
  • Reply 35 of 47
    rogifan_newrogifan_new Posts: 4,297member
    bobschlob said:
    Using old version touch ID units in their new phones only hurt themselves.
    Why? Apple Pay was never slow on my 6. The problem with Pay in the USA isn't speed but poor education/marketing from Apple and not enough merchants accepting it.
    latifbpration al
  • Reply 36 of 47
    latifbplatifbp Posts: 544member
    red oak said:
    $10.5 billion would net Apple approx $15 million in revenue, assuming the reported .015% commission for all transactions.  Likely, the net is much smaller.  Then, subtract all the expenses including marketing and employees costs

    Not good if true,given Apple has been at this for a couple of years  


    Oh, right. I remember when Pay was introduced Eddie Cue said "Please try it. We really need this. If this doesn't take off Apple is done. This is it folks. Sink or swim with Pay." /s
    ration al
  • Reply 37 of 47
    chiachia Posts: 712member
    emoeller said:
    Likely struggling also because it's also facing some new, formidable
    headwind. See:

    ComputerWorld - EMV rules ruining Apple Pay :

    http://www.computerworld.com/article/3074888/retail-it/emv-rules-ruining-apple-pay.html

    Interestingly, I think most - if not all - credit cards have an area for the
    cardholder's signature on back, and states, "Not Valid Unless Signed",
    yet I have never seen any cashier check for any signature on the
    back of any cards that we have ever had or used. There seems to
    exist a double standard for authentication, depending on method used.
    Thanks for this link, it explains why I now have to sign transactions, which is really a pain and holds up the line.  I would hope that Apple is working to correct this.  In speaking with POS folks they really have no clue about these new terminals and how they work.  For them it is a large capital expense that was/is being forced on them by the card issuers under threat of transferring fraud liability to the retailer if they don't install them.  While there may be 'smarter' terminals that can distinguish biometrics I'll bet they are more expensive and probably require more installation and setup time.
    Actually, the author of the article demonstrates an astounding lack of knowledge and ignorance of the subject: there is provision for on device verification, e.g. Touch ID, within the EMV contactless specification. After looking at the official EMV website, I suspect the problem is not so much the EMV system itself but merchants or even card processors misconfiguring the card terminals.

    http://www.emvco.com/faq.aspx?id=287#12
    What Cardholder Verification Methods (CVM) can be supported for mPOS?
    All CVMs as currently defined in EMVCo specifications can be supported, including:
    - Online PIN
    - Plaintext and enciphered offline PIN
    - Consumer Device CVM (contactless only)
    - Signature
    - Combinations of above
    - No CVM

    What is Consumer Device CVM (CDCVM)?
    CDCVM is a CVM (e.g. passcode, biometric) that is captured and verified on the cardholder’s consumer grade mobile device. The results of the CDCVM verification are presented to the mPOS solution an outcome “Confirmation Code Verified” (as described in Book A here, Section 5.5.8)
    edited June 2016 ration al
  • Reply 38 of 47
    the.bearthe.bear Posts: 14member
    Apple Pay is a feature of the Apple ecosystem and not product or service onto itself at the moment. Apple wouldn't need to make any revenue at it as long as it drove users to its products all would be good. 
    Apple Pay was originally intended to be a key part of Apple's big push to lure Android (more specifically Samsung Galaxy) users away. It didn't work because so few retailers supported NFC payments that Apple Pay was never able to become a real differentiator in ways that most iPhone owners regularly use their devices. Apple made a huge error. Instead of working with retailers to implement a solution that would be in their interests, Apple thought that they could side with the banks and pressure the retailers, which totally backfired. Apple treated the retailers as if they were, well, companies like Apple, who enjoys both high margins and heavy brand loyalty. Instead, large retail chains operate at very low margins, with lots of individual stores actually being operated at a loss to retain market share. Also, their consumers have absolutely no brand loyalty, but will instead just patronize who offers the most convenience or best deal. So, it is very much in the interests of those chains to avoid credit card fees wherever possible, to collect consumer data that can be used by analytics to create micro-campaigns to target shoppers, and to maintain rewards/loyalty programs to drive as much repeat business as possible.

    Another problem: Apple underestimated how quickly Google and Samsung would be willing and able to respond. First, Google had absolutely no pride in the product that they had introduced with much fanfare and worked hard to promote since 2011 and instead dropped Google Wallet like a soiled nakpkin, and Samsung did the same with their even less successful Google Wallet competitor. Instead both made major acquisitions (Softbank by Google, LoopPay by Samsung) and were able to launch competing products with real hardware and software support in less than a year. This was due to Samsung and Google being able to repurpose the infrastructure from their previous mobile payment apps for their new ones and also - along with their suppliers like Qualcomm - had been working on issues like biometrics, encryption and security since Apple launched the iPhone 5s. Had Apple launched Apple Pay with the iPhone 5s instead of the iPhone 6, it would have been nearly 2 years before the Android ecosystem would have been able to respond - just as it took that long to adopt 64 bit hardware, encryption and decent biometrics in flagship and mainstream devices - and Apple would likely have been able to gain a lot more headway with retailers in the interim. Instead, in addition to Android Pay and Samsung Pay, retailers and banks are launching their own mobile payment products that are modeled - and even named - after Apple Pay, fragmenting a space that Apple could have owned had they played their cards differently.
    singularity
  • Reply 39 of 47
    mike1mike1 Posts: 2,995member
    tokyojimu said:
    I use it sometimes just for fun, both in the U.S. and in Taiwan, but the truth is it's often slower than swiping and takes about the same amount of time as dipping. It really is a solution in search of a problem.
    Apple Pay takes 2-3 seconds at most.  Dipping a chip card takes 13 seconds on average now.  What are you talking about?????
    Haven't heard the term "dipping" before to describe the waste of time we now need to put up with for chip and pin? I'll use Apple Pay anywhere it is accepted rather than put up with the interminable wait in order to put my card away.
  • Reply 40 of 47
    gatorguygatorguy Posts: 23,393member
    the.bear said:
    Apple Pay is a feature of the Apple ecosystem and not product or service onto itself at the moment. Apple wouldn't need to make any revenue at it as long as it drove users to its products all would be good. 
    Apple Pay was originally intended to be a key part of Apple's big push to lure Android (more specifically Samsung Galaxy) users away. It didn't work because so few retailers supported NFC payments that Apple Pay was never able to become a real differentiator in ways that most iPhone owners regularly use their devices. Apple made a huge error. Instead of working with retailers to implement a solution that would be in their interests, Apple thought that they could side with the banks and pressure the retailers, which totally backfired...
    Another problem: Apple underestimated how quickly Google and Samsung would be willing and able to respond. First, Google had absolutely no pride in the product that they had introduced with much fanfare and worked hard to promote since 2011 and instead dropped Google Wallet like a soiled nakpkin, and Samsung did the same with their even less successful Google Wallet competitor. Instead both made major acquisitions (Softbank by Google, LoopPay by Samsung) and were able to launch competing products with real hardware and software support in less than a year. This was due to Samsung and Google being able to repurpose the infrastructure from their previous mobile payment apps for their new ones and also - along with their suppliers like Qualcomm - had been working on issues like biometrics, encryption and security since Apple launched the iPhone 5s. Had Apple launched Apple Pay with the iPhone 5s instead of the iPhone 6, it would have been nearly 2 years before the Android ecosystem would have been able to respond.
    In actuality Google Wallet failed because the carriers had their own mobile payment plans and so refused to support Google's hardware-based "secure-element" that Google made a requirement for secure payment processing. Yes, Google's original Wallet required encryption and tokens stored in a walled off hardware chip in place of actual card credentials for mobile transactions. Sound familiar?:

    "Google Wallet had issues with major carriers, who said that the application was harmful to their networks because it required integration with a proprietary piece of hardware called the “secure element". Meanwhile, AT&T, Verizon, Sprint, and T-mobile were all collaborating on their own NFC mobile payment solution called Isis, which also required the secure element. The mobile payment tug-of-war has resulted in a stalemate."

    When Apple developed Apple Pay the carriers finally realized they had little chance of gaining traction with Softcard (previously the unfortunately named ISIS) and sold it off to Google, and removing their objections to Google Wallet. That's why the reboot. 

    Of course Apple found several ways to improve the system in the three years following Google's release of their NFC-based tokenized payment system. Without Apple and the nail-in-the-coffin they brought to the carriers alternative plans Google Wallet/Android Pay would still be languishing, a great idea without a chance in hell of succeeding.

    As for your reference to Samsung dropping their mobile payment system once Apple Announced theirs I'm totally unaware of them even having one prior to 2015. Where did you read about one preceding Apple Pay? As far as I know Samsung Pay is a "me-too" reaction to GoogleWallet/Android pay and Apple Pay, not all that badly done but not replacing something they already had.

    Of course timing Apple Pay for release about the same time as the requirements for CC companies/banks to switch over to Chip-n-Pin cards kicked in certainly helped as it got the banks on their side. As the saying goes timing is everything. Well, maybe in Apple's case not everything but it sure did help a whole lot

    edited June 2016 ration al
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